Which of the following methods should be selected if a company terminates all processing at the split-off point and desires to use a cost-allocation approach that considers the "revenue-producing ability" of each product?
A) Gross margin at split-off method.
B) Reciprocal-accounting method.
C) Relative-sales-value method.
D) Physical-units method.
E) Net-realizable-value method.

Question

Quizplus · Accepted Answer

The relative-sales-value method allocates joint costs based on the revenue-producing ability of each product at the split-off point, making it the appropriate choice for a company that terminates all processing at the split-off point and desires to use a cost-allocation approach considering the "revenue-producing ability" of each product.

Which of the Following Methods Should Be Selected If a Company